Businessman Pleads Guilty In Federal Contract Kick-Back Scheme
COLUMBUS, Ga. – A former businessman engaged in a complicated kick-back and wire fraud scheme involving federal contracts worth more than $36 million dollars has pleaded guilty for his crimes, said Charlie Peeler, the U.S. Attorney for the Middle District of Georgia. David Kennedy, 67, of Nashville, Tennessee, entered a guilty plea this morning before U.S. District Judge Clay Land to one count conspiracy to violate the Anti-Kickback Act and commit wire fraud. Kennedy faces a maximum five years in prison and a $250,000 fine. A sentencing date has not been scheduled. There is no parole in the federal system.
According to the signed guilty plea, a company Kennedy worked for was awarded a $29 million federal contract in 2013 for work on Fort Benning in Columbus, Georgia. The same company was awarded a separate federal contract in 2014 in the amount of $7.7 million for work on Fort Gordon in Augusta, Georgia. On both projects, Kennedy illegally directed millions of dollars of subcontract work to Southern Atlantic Construction in exchange for thousands of dollars in kick-backs, in violation of the Anti-Kickback Act. Kennedy opened a bank account in Tennessee, where he moved his illegal gains, committing wire fraud.
“Investigators unraveled a complicated kick-back scheme concocted by the defendant to enrich himself to the detriment of the American taxpayer. Combatting fraud against the United States remains a top priority of this office,” said U.S. Attorney Charlie Peeler. “I want to thank the FBI and the U.S. Army Criminal Investigation Command for their excellent work investigating this fraud.”
"With this guilty plea Kennedy acknowledges his criminal wrongdoing and will now be held accountable," said Chris Hacker, Special Agent in Charge of FBI Atlanta. "The FBI strives to expose corrupt kickback schemes that undermine the normal process for obtaining federal contracts thereby costing our taxpayers dearly."
This case was investigated by the FBI and the U.S. Army Criminal Investigation Command. Assistant U.S. Attorney Crawford Seals and Trial Attorney Vasanth Sridharan of the Department of Justice’s Criminal Division, Fraud Section are prosecuting the case for the Government. Questions can be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603 or Melissa Hodges, Public Affairs Director (Contractor), United States Attorney’s Office, at (478) 765-2362.